In a global IT scenario, among the most widely talked about services, Cloud Computing continues to rule the roost. Some organizations have already adopted cloud-based services in some form, while a few others have labeled it as a marketing gimmick—just a guise for IT services already available and offered over the wire (Internet). Some ill-informed lot even describe their own Internet-based services as cloud services, even though the basic criteria aren’t met.

In one its recent reports, Gartner has described Cloud Computing as one of the most hyped IT concepts of 2009. The report describes the levels of hype as ‘deafening.’ The research agency observes that every vendor is expounding its cloud strategy and variations such as private Cloud Computing and hybrid approaches have compounded the hype.

But Cloud Computing is anything but a hype. Companies worldwide have been successful in offering their services based on this model, take Salesforce, Google and Amazon for example. They have been successful at offering IT capabilities such as software/application over the Internet as an on-demand pay-per-use service. Salesforce.com has made itself synonymous with the phrase Software-as-a-Service (SaaS) and has also been offering Platform-as-a-Service for developers to develop applications.

Current State
Globally, Cloud Computing is yet to make a major impact across IT organizations. As with every new IT technology or implementation, the concept too will take some time to make inroads in India. However, given the addressable market opportunity, it is sure to find larger acceptance once popular.

In one of its recent reports, IDC estimated that only 5 percent of Indian enterprises have adopted Cloud Computing. However, the report also observes that an estimated 40 percent are looking at adopting cloud-based services.

A major challenge that is keeping organizations from adopting these services is a perceived notion that shared infrastructure comes with lower levels of security, data integrity and performance. Among other reservations is the fear of vendor lock-in with all the business data being tied to a proprietary infrastructure. Specific to India, most vendors have noted bandwidth to be a major challenge, which is preventing large scale adoption of Cloud Computing.

Says Karthik Ramarao, Business Development Manager, Unified Computing, Datacraft, “Many cloud providers are offering proprietary applications. The migration to these applications comes with training issues, change management and the fear of total dependency on these applications. Also, it is only recently that the network bandwidth has started to improve in the country.”

Vishal Sikka, Chief Technology Officer, SAP AG observes that though Cloud Computing is being embraced across verticals such as BFSI, Healthcare, IT, BPO, manufacturing, pharmaceutical, government and education, the industry still has a long way to go. “The market does not know how to deliver mission-critical business applications in the cloud yet. Most companies are delivering CRM that runs on a transactional database. However, it will be difficult to do complex analytics on such platforms.”

Clouds are coming
Most vendors believe that the challenges are based on perceptions and the real challenges are already being addressed. Many of these vendors, who traditionally had on-premise-based solutions, have started offering various solutions on an on-demand basis.

SAP through its Business ByDesign solution has been offering ERP on an as-a-Service basis. In India, the company has a few customers including Prognosys, a leading market intelligence and research solutions firm, and Ace Data Devices, a small-size enterprise specializing in storage and data consolidation systems. Trend Micro too has started offering hosted e-mail security services through its InterScan Hosted Messaging Security (IMHS) solution, which is specifically targeted at SMBs.

Focus on SMBs
The type of flexibility that Cloud Computing offers and its proposed cost effectiveness makes it a perfect fit for SMBs. Larger enterprises already have a large amount of legacy infrastructure. Until Cloud Computing is commoditized, they cannot shift from an all-on-premise infrastructure to an all-on-cloud infrastructure. Application portability, compatibility and licensing could be some of the issues that these organizations would have to deal with.

SMBs on the other hand have a smaller employee base and lesser resource requirements. However, capital investments are a major challenge for these organizations. Cloud-based solutions such as SaaS and Infrastructure-as-a-service (IaaS), which cater to specific requirements, fit the bill for adoption by such organizations. These services can also be looked at by companies, both small and large, for application development projects.

“In particular, traditional outsourcing providers have started offering cloud environments where SaaS providers can come onboard and provide services. This is a good fit from the perspective of the cloud provider, who has the reach and managed services capability and can use the complementary services from SaaS providers. These environments would be targeted at the SMB market. Large enterprises would eventually look at IaaS after they completely understand how to manage the risks,” observes Shreekanth Joshi, Associate VP, Practice Head for SaaS and Cloud, Persistent Systems.

True to this statement, telecom majors such as AT&T and Verizon are extending their data center prowess to other vendors for providing cloud-based services globally. Back in India, Verizon is offering compute and storage capacities on rent to organizations for software development projects. Hosted and managed service providers such as Netmagic, Wipro and Tata Communications have recently announced their respective SaaS and IaaS offerings that promise to fulfill the premise of a Cloud Computing infrastructure.

Netmagic has recently introduced its Cloud Computing services, which includes compute services on demand, server resources on demand and even a private cloud infrastructure. Tata Communications has partnered with NetApp wherein the latter with its latest cloud enabling technologies will help Tata Communications deliver infrastructure on demand to SMBs and large enterprises. Wipro, with its recent partnership with Oracle, will provide hosting services to software companies looking to offer their products on the SaaS model. Called w-SaaS, the hosting service is based on Oracle’s grid computing technologies.

Clouds everywhere
Despite the ambiguity of what qualifies as a cloud service and the concern if a similar level of SLA can be provided in a cloud environment, there is a growing interest in Cloud Computing due to the potential cost savings that it has to offer. The industry too, is tuning itself to come up with some promising Cloud Computing offerings. It is only a matter of time till perceptions change, and Cloud Computing goes beyond just hearsay.